Sonet: Who's Ahead in Long Haul?

Cisco Systems Inc. (Nasdaq: CSCO) announced yesterday that it's leading the North American market for long-haul Sonet OC48 products, based on figures from RHK Inc. The figures were published in the market research firm's January 2001 report, "SONET Transport and DCS Long-Haul SONET Market Forecast." OC48 links support 2.5-Gbit/s in carrier networks.

North American Long Haul Sonet OC48 Market Cisco's announcement is interesting for several reasons. First, it demonstrates the priority Cisco's assigned to gaining a significant toehold in the market for mainstream carrier equipment, a market the company entered seriously less than two years ago with its acquisiton of Cerent Corp.

But Cisco also has raised a bit of confusion. That's because the success of Cisco's Cerent box, now dubbed the ONS 15454, has been chiefly in network edge applications, not in the long-haul part of the net. The ONS 15454 was among the first products to aggregate OC48 links and feed them from carrier points of presence (POPs) to the network core.

It's also notable that Cisco's announcement this week didn't mention a number of other interesting points from RHK's report. For instance, RHK's figures show Nortel Networks Corp., the overall Sonet market leader, breathing down Cisco's neck in long-haul OC48. Just three points separate the two companies' slices of the OC48 pie.

What's more, RHK's report indicates that Cisco's not leading the most lucrative segment of the North American long-haul Sonet market. Sales of Sonet OC192 (10 Gbit/s) gear were $2.763 billion of an overall market of $5.03 billion in 2000 -- more than the $1.944 billion for OC48 (although more OC48 ports actually shipped). And RHK says that OC192 is the fastest-growing segment of the long-haul market.

What's more, Cisco's not on the map at all when it comes to sales of Sonet OC192 links, according to RHK. Instead, Nortel sales account for 95.1 percent of that market, with the rest of the pie divvied up among other players in tiny slivers.

North American Long Haul Sonet OC192 Market Neither Cisco nor Nortel seems eager to emphasize these points -- for different reasons. For its part, Cisco doesn't yet support OC192, and understandably eschews discussing the potential of that market. "We don't talk about unannounced products," a spokesperson says. And although Cisco's talked for months about adding OC192 to the ONS 15454, nothing has materialized so far.

Some analysts other than RHK say Cisco needn't worry too much about OC192 in the metro space -- where its OC48 presence is strongest. "OC192 isn't big in the access space," asserts Seth Spalding, director at Epoch Partners. He says some vendors, such as ONI Systems Inc. (Nasdaq: ONIS), offer OC192 as an access option, but he doesn't foresee it taking off there for at least a couple of years.

For its part, Nortel seems to view its leadership in long-haul Sonet OC192 links as a mixed blessing. That's because Nortel would rather publicize figures that show its role in next-generation products via sales of DWDM (dense wavelength-division multiplexing) gear. Ironically, Nortel gave a mixed message last week in announcing its market share in DWDM (see Nortel: Top Dog, but for How Long?) -- just as Cisco did with RHK's figures this week.

In both cases, attempts to pin down one aspect of the market served to emphasize a larger, more complex picture that wasn't initially discussed.

-- Mary Jander, senior editor, Light Reading http://www.lightreading.com

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areyousure 12/4/2012 | 8:48:39 PM
re: Sonet: Who's Ahead in Long Haul? bibyahoo:

This is not a stock trading message board. This is about technology. Go to http://www.yahoo.com and get on their message boards. This will be what you are looking for.
melao 12/4/2012 | 8:48:37 PM
re: Sonet: Who's Ahead in Long Haul? "Cisco 15454 with OC-192 ? Just got delayed until 9/01 for GA. This is the 3rd or 4th slip? Besides the 15454, what other products is the Cisco Optical Networking Group selling? The answer is nothing. Their cutting deals left and right to move the 15454; profits have got to be an issue with these guys. I've seen their prices and I know their costs. They've got a big problem on their hands! Just wait and see"

And whenever Cisco deploys its OC192 ADMs, Nortel will still be winning as Nortel's equipment is proven to be safe and reliable on field for years, something that Cisco will have to catch up.
On oc192 rates, reliability on the product is something that is really a competitive factor.
melao 12/4/2012 | 8:48:37 PM
re: Sonet: Who's Ahead in Long Haul? "I have to agree. Plus Ciena's absence looks a little weird"

As far as i know, Ciena doesn't have any ADMs, just optical transport. This report is about sonet gear, not dwdm.
melao 12/4/2012 | 8:48:36 PM
re: Sonet: Who's Ahead in Long Haul? "Dont buy from nortel. their product sucks !
I bought from them some OC's for my house and the quality was really bad.

they also dont deliver on time.

I sent a packet and it took almost 10 ms to arrive only to realize if was damaged in the way.

I reccomend everyone to buy from babylon instead.
their product is very cute."

This is the oddest message i've ever seen on Lightreading.
sonet49er 12/4/2012 | 8:48:35 PM
re: Sonet: Who's Ahead in Long Haul? Cyras K2 can be deployed as ADM.
optinuts 12/4/2012 | 8:48:34 PM
re: Sonet: Who's Ahead in Long Haul? come on 49er, this is the new millenium. since when did cyras have market share in 2000.

pls read the string of posts before kicking in with your nutty responses.

i think light reading owes us an explanation on a misleading article on sonet market share. i was shocked to see fuji absent from this. no fuji posters on this board????
Telecom_Guy 12/4/2012 | 8:48:33 PM
re: Sonet: Who's Ahead in Long Haul? The article was mentioning the revenues of 2000 ($1.9Billion). So it's not looking at already installed market share, but new revenue. Specifically the one for 2000. Although Fujitsu has alot of old equipment still out there, it's not getting the 49.3% the angry Fujitsu people claim on this board. I agree with the 2% or less figure. Fujitsu is "El Stinko". That's the technical term for their products. And another guy talking about Ciena's absence... Are they smoking something over there? Since when has Ciena had a huge share of OC48 sales / revenue. They only recently acquired Cyras. Even then I think they have separate booths at OFC. And as for the Optera guy that mentions the Nortel lead in the OC192, well that part is true. Everyone is trying to catch up, but once they do, it won't be hard to beat that slow turtle. They product is huge!! But I guess you have to buy what's available no matter what it looks like. Anyone remember those huge Rockwell OC12 nodes? LOL Well that's how I see the Nortel OC192. A switching fabric card the size of my grandma's drawers. Can't you guys at Nortel get with it and desgn a smaller switch fabric? And siemens? Well what can one say about a dinosaur. Plus look at the name. Who would want to work for a company full of Siemen.......

These are just my opinions only. I don't work for any of those company's and don't care to either!!
Da Bomb 12/4/2012 | 8:48:31 PM
re: Sonet: Who's Ahead in Long Haul? Let's keep our eye on the ball, folks. It's about providing service provider customers with an aggregation / migration solution for Metro SONET /Optical deployments. The winner will be the vendor that designs and delivers a single backplane architecture that will scale, with both line & trib rates ranging from DS-3 to OC-768. Give me integrated ATM / IP fabric on the box too. No more forklift upgrades, please.
loosemoose 12/4/2012 | 8:48:29 PM
re: Sonet: Who's Ahead in Long Haul? Hey Telecom_Guy,

This article is about market share, i.e. the amount of revenue vendors brings in divided by the total market. This has nothing to do with having the best technology.

This is the United States and we all know that a company's real worth is tabulated at the cash register. For all you out their making the better mouse trap, be warned - it's not about having cool technology, it's all about serving your customer's needs and by how much money you make at the end of the day.

Going back to the problems of this article, please understand this - the market shares presented here and in Cisco's press release do not include the Metro SONET market (which came in at $5.4B in 2000 according to RHK's Metro SONET report).

Cyras / Ciena does not show up in this report either - the only small start up to make it is Astral Point.

If Mary or someone else would look into this, maybe we can find out who the total SONET market leaders really are.

Belzebutt 12/4/2012 | 8:48:25 PM
re: Sonet: Who's Ahead in Long Haul? "A switching fabric card the size of my grandma's drawers. Can't you guys at Nortel get with it and desgn a smaller switch fabric?"

Hey, almost all if it is heat sinks.
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